Aspire Mining’s Mongolian rail infrastructure subsidiary, Northern Railways LLC, has signed an agreement to complete the first stage of a bankable feasibility study (BFS) for the Erdenet to Ovoot railway with China Railway 20 Bureau Group Corporation (CR20G), a wholly-owned subsidiary of China Railways Construction Corporation (CRCC).
The Noble Group retains an option to acquire 10% of Northern Railways and fund 10% of the rail development capital.
Preliminary work has commenced on the first 250km of maps and an initial payment of US$250,000 has been paid. Further payments will be conditional on Northern Railways receiving a rail concession and funding.
The first stage work comprises desktop engineering for the entire alignment in order to provide additional project definition. Outputs will include a detailed bill of quantities, detailed construction schedule and a preliminary capital cost estimate.
Post the granting of a concession agreement for the Erdenet-Ovoot railway and given funding is in place, Northern Railways will look to commit to the balance of the BFS. The total cost to Northern Railways will be US$6.5 million (+ VAT) for both the first stage and the final BFS.
CR20G is a wholly-owned subsidiary of CRCC, employs more than 20,000 personnel and has significant international experience completing recent rail projects in Angola, Mongolia and Mozambique.
The execution of the first stage agreement follows the recent inclusion of the Northern Rail Line in the Mongolian Government’s National Rail Policy, the inclusion of phase 1 (Erdenet-Ovoot section) on the concession list of approved projects, and the signing of an EPC framework agreement with CR20G.
Aspire’s managing director David Paull said, “Both Aspire and CR20G see the benefits of maintaining the recent momentum for the Erdenet to Ovoot railway. Commencing desktop engineering now will put Northern Railways into a better position to negotiate a concession agreement with the Mongolian Government and advance funding discussions.”